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You’re a homeowner. It’s your name on the title and your one goal is to maximize the profit on the sale of your home. Here’s what whoever is representing your home must do:

• Price your house accurately
• Qualify buyers
• Advertise the listing
• Understand mortgages, regulations and contractual law
• Coordinate all the details of a closing

With this established, let’s look at the pros and cons of selling your home without an agent.

Pro: You Save on Several Fees which can Equate to Thousands of Dollars

Unless you have something against real estate agents, the main reason to avoid working with one is to save money. Since it’s not a small amount of money, it’s understandable if this is attractive. There’s always a risk of losing money in other areas due to inexperience but you will save substantially on agent fees.

Con: To do it Right you must Treat it as a Full-time job

Selling a home involves a lot of work. From research to staging to open houses to negotiating the deal, selling a home isn’t as simple as putting a “for sale” sign on your lawn. You should enter the process knowing that it is more than a hobby and requires daily commitment.

Pro: Complete Control

This one is no surprise. Some people want the control and are comfortable being responsible for every aspect of a sale. You will position every piece of furniture in your home, you will write every word of a listing and you will negotiate every term of the contract.

If this appeals to you, then you might fare well without an agent.

Con: You are Assuming Legal and Financial Risks

This is a big one. There are tons of legal and financial risks associated with real estate. One wrong step could cost thousands or have severe legal ramifications. It’s vital to weigh out the cost savings vs. the financial risk involved along with the potential cost of common legal issues.

Selling your own home is risky but that’s not to say that you can’t or shouldn’t do it. It comes down to comfort, personality and situation. Just know that if you go this route, it will take up a ton of time, could cost more in the end and there’s the potential for fall out.

One of the best reasons to apply for a home equity loan is to improve your home and raise its value. If this is your goal than you want to make sure every dollar is invested in the right improvements and not into areas that won’t yield a return.

This means that even if you want to finally install surround sound in your home theatre, it might make more sense to grout bathroom tile.

There are several areas of home improvement that can potentially turn your home equity loan into a healthy investment.

A New Kitchen Can Revitalize your Home

There is no room or aspect of a home that figures more greatly into its value and sale than the kitchen. It’s usually the showstopper and the centerpiece that can inspire bidding wars. When looking to increase the value of your home, the conversation should start (and possibly end) with a kitchen revamp.

Finish that Basement

An unfinished basement can look like a crime scene and there’s nothing worse than when you’re giving a tour of your home and your guest asks about your unfinished basement.  The price of a basement was built into the price you paid so wouldn’t you rather it be more than boxes, hockey equipment and a rusty furnace?

Using money from a home equity loan to turn a dank basement into a functional living space will pay off in spades.

Don’t Overlook Small Improvements

From sealing a driveway to a new backsplash even more modern appliances, smaller changes cost money but they can result in a more valuable home. Now, the growth might not be enormous but the little things can add up and make a difference in the price of your home.

There are dozens if not hundreds of small improvements you can make in your home. The best strategy is to create a room by room checklist and knock them off over a short window of time.

For most, a home is their most prized asset. By investing further in it you are securing your nest egg or retirement plan. This is never a bad idea and a home equity loan is a proven way to achieve this.

It’s a lot of financial responsibility to afford and fund a home. There’s the monthly mortgage, maintenance, insurance, taxes and maybe even condo fees. It can become quite heavy so homeowners should always be looking to lower their monthly fees and the amount of interest they have to pay.

Refinancing is one of the more conventional ways of doing this. There are a few pros and cons to review when making this decision

What is Refinancing?

Basically, this means applying for your loan all over again and hoping to be declared a stronger and safer applicant. With this will come the opportunity to negotiate better terms and can save you some money in both the short and long term.

Pro: Saving Money

This is a big one and is usually the main reason that people refinance their mortgage. As you improve your credit score, grow your career and achieve more of your earning potential, you could be viewed as a strong applicant by a lender. If this is the case then refinancing is worth considering.

Con: You Might have to Sacrifice Certain Aspects of your Mortgage

When going into a refinancing arrangement, it’s important to recognize that you might not walk away with a better deal in every way. You could move from a fixed-rate to an adjustable rate and end up with a higher interest rate. You could decrease the equity in your home. There could even be fees and penalties.

Pro: Access to Funds and Consolidation

Refinancing can free up more of your money for debt repayment or it can open more funds for you to consolidate all your debt. These funds can be used in any way you want including home renovations, travel, retirement or to pursue business ventures.  

When it comes to refinancing remember that you’re a customer. Lenders want your business and to see you in a good financial situation that benefits both them and you. To achieve this, they are often open to refinancing if the new financing deal is realistic.

Private mortgages are a valuable but under-utilized option for mortgage applicants. It’s especially useful for those who might not have the strongest application or want a little more flexibility that can come with working with a bank or traditional lender.

Strict Lending Rules Means that Alternative Options are Necessary

As more regulations are imposed on potential homeowners, there’s going to be a big pool of people who will have trouble qualifying. A portion of this pool won’t have access to a guarantor or be able to pay a higher interest rate.

The rules imposed by the Federal Government in October 2016 is a prime example of how private mortgages can fit into the business of lending and provide an intriguing option for many people.

How do I Apply for a Private Mortgage?

You can research, approach and meet with private lenders the same way you would with traditional. This is not a shady business but is out in the open and can be discovered through word of mouth or by searching the internet.

Each will have their own stipulations and regulations so it makes sense to shop around.

The Pros of a Private Mortgage

Not every applicant has a full-time job, T4, big down payment and strong credit rating. The big banks typically balk at borrowers who don’t check off enough boxes.

Financing through a private mortgage is a distinct alternative for someone (or a group of people) who fall into any of the following:

• Self-employed
• Foreign investors
• Applicants who are rebuilding their credit
• Applicants who owe taxes that are in arrears
• Anyone looking to flip a property
• Looking for equity for other ventures like starting a business

The Cons of a Private Mortgage

With this type of arrangement, the property matters as much as the applicant. You could be rejected if the property or location are not appealing to the lender.

There are always fees associated with working with private lenders whereas with traditional lenders, the banks typically pay the broker. It can be as low as 1% or as high as 5% so it’s best to ask each lender you are negotiating with.

If you’re having difficulty getting approved by traditional lenders than a private mortgage is worth reviewing. There are a ton of benefits using a private mortgage and it’s a proven way to get into the market.